Agenda item - Repairs & Improvements Partnership Update

Report of Acting Executive Director, Economy, Environment & Culture (copy attached).

(1)            That the updates on progress following the initial report to both Audit & Standards Committee and Housing & New Homes Committee in January 2016, be noted.

26.1   The Committee considered a report of the Executive Director Economy Environment & Culture which provided an update on processes in place within the Repairs & Improvement Partnership with the Mears group to manage quality and avoid overpayments following the results of an internal audit review of overpayments identified by the council in respect of contracted housing repairs. The report was presented by the Business and Performance Manager who explained that the agreed actions undertaken were set out in paragraphs 3.5 to 3.13 of the report.  This had included the reduction on the use of sub-contractors (3.8) and onward quality assurance work (3.10).  David Miles, Chief Executive, Mears Group and Lucas Critchley, Managing Director, Mears Group were in attendance.  

26.2   Councillor Bell referred to paragraph 3.11 on page 283.  This related to Mears funding an additional council resource to work alongside the existing team of three quantity surveyors in sample checking the post inspection process.  Councillor Bell asked if the quantity surveyors were Mears Group employees.  Councillor Bell mentioned that the Committee had heard earlier about dissatisfaction from residents with repairs.  Would there be an independent inspection?  

26.3   The Head of Housing Strategy, Property & Investment explained that the council had its own quality assurance resource and its own clerk of works.  The council would look at the client contractor balance in the review being taken forward. 

26.4   Councillor Miller welcomed the reduction in spend on sub-contractors.  He referred to paragraph 3.5 and the fact that Mears had agreed to pay interest.  Councillor Miller asked how the repayment was progressing.  The Head of Housing Strategy, Property & Investment explained that the council had recovered all loss on the contract including percentage profit.  David Miles stated that Mears Group had committed to paying the interest and full charge.  Councillor Miller requested that officers check that the interest charge sum had been collected. 

26.5   Councillor Moonan welcomed the fact that the percentage of sub-contractors was down to 12%.  She asked if 12% was a desirable number, and the right balance or was it expected that it would continue to reduce.  She noted that the number of jobs was 12% and the cost was 31%.  She assumed that they were big expensive jobs.

26.6   Lucas Critchley explained that 12% was broadly the right figure for specialist works. Mears would continue to review this.  Work such as minor drainage jobs were now carried out in-house.  Mears Group sub-contracted the larger more complex jobs which was why they had a higher value.

26.7   Councillor Mears stressed that Mears Group needed to provide a good service to the council and should address the concerns of tenants.  Councillor Mears was pleased that the investigation had resolved many issues, but emphasised that it was necessary for Mears Group to treat tenants as customers. 

26.8   The Chair mentioned that the committee had requested six month updates and to the credit of Mears Group, they had been working closely with the council.

26.9   Councillor Druitt asked if the figure of £513,113 was the total or was there any re-payment outstanding.  He pointed out that if an inspection was carried out at the end of a job there was no way of knowing how many coats of paint had been applied.  Councillor Druitt asked for reassurance that there was some kind of quality assurance mechanism that was followed during the period the job was being carried out, in addition to the inspection at the end of the process. 

26.10  David Miles confirmed that the figure of £513,113 was the total value.  However, he did not know if interest was included within that figure.  The Business and Performance Manager confirmed that in terms of inspection, that both the council and Mears would review an ongoing job.  Each work stream would have a dedicated supervisor and manager, working for Mears, and a contract manager/clerk of works who worked for the council who would be involved from specification stage.  For larger projects they would be involved in regular checks whilst works were underway.

26.11  RESOLVED:-

(1)            That the updates on progress following the initial report to both Audit & Standards Committee and Housing & New Homes Committee in January 2016, be noted.